The Court of Appeals summaries are written for the Colorado Bar Association by licensed attorneys Teresa Wilkins (Denver) and Paul Sachs (Steamboat Springs). Please note that the summaries of Opinions of the Colorado Court of Appeals are provided as a service by the Colorado Bar Association and are not the official language of the Court. The Colorado Bar Association cannot guarantee the accuracy or completeness of the summaries.

In these bad-faith cases, defendants James Wolter, MD and Pinnacol Assurance appealed the judgments entered on jury verdicts in favor of plaintiff Michael Schuessler, who cross-appealed certain trial court rulings. The judgment against Dr. Wolter was reversed and his case was remanded for a new trial. The judgment against Pinnacol was affirmed in part and reversed in part, and the case was remanded for further proceedings.

Schuessler was injured on the job and filed a workers’ compensation claim with R. Merrill, Inc. (Merrill), his putative employer. Pinnacol, which provided workers’ compensation insurance coverage for Merrill, denied the claim. Dr. Wolter, a neurosurgeon, performed surgery on Schuessler for his injuries. The surgery caused damage to his spinal cord. Schuessler commenced a medical malpractice action against Dr. Wolter. Schuessler also filed a common law bad-faith breach of insurance contract action against Pinnacol, contending that it had wrongly denied him workers’ compensation benefits. The cases were consolidated, and a jury awarded damages to Schuessler against Pinnacol and Dr. Wolter.

On appeal, Dr. Wolter contended that the trial court erred in rejecting its proposed jury instruction, arguing that a physician does not guarantee or promise a successful outcome simply by treating or agreeing to treat a patient, and an unsuccessful outcome does not, by itself, mean the physician was negligent. Dr. Wolter’s expert specifically stated that the outcome could occur without negligence. Because the proffered instruction accurately stated the law and no other instruction informed the jury that Dr. Wolter could not be held liable merely because of a bad outcome, it was reversible error for the court to reject it.

Pinnacol asserted that the trial court erred in denying its motion for directed verdict or judgment notwithstanding the verdict. The defense of fair debatability is not in itself a complete defense to a bad-faith claim. Here, the reasonableness of Pinnacol’s conduct was disputed, and a reasonable person could reach the same conclusion as the jury. Accordingly, the trial court did not err in denying the motion.

Pinnacol also argued that the jury awarded excessive and duplicative economic and noneconomic damages to Schuessler, warranting a new trial. However, there was sufficient evidence in the record to support the award of economic damages. Additionally, there was support on record for the noneconomic damages award, and the amount awarded was not so grossly and manifestly excessive as to indicate that it was based on passion or prejudice.

Pinnacol further contended that the damages award was affected by the trial court’s erroneous failure to admit an exhibit it tendered at trial. Pinnacol’s exhibit depicted the amount and duration of its payments to Schuessler in chart form. Because the information contained in the exhibit was covered by other evidence introduced, the trial court did not abuse its discretion in rejecting the exhibit.

Pinnacol asserted that the jury awarded duplicative damages because it awarded Schuessler the same amount of noneconomic damages that it awarded against Dr. Wolter. However, Pinnacol failed to overcome the presumptions that the jury followed the instruction not to award duplicative damages.

Pinnacol contended that the trial court erred in allowing Schuessler’s bad-faith insurance expert to testify at trial. There is no per se requirement that an expert should be excluded unless he or she has adjusted a workers’ compensation claim in Colorado, and Schuessler’s expert was otherwise qualified as an expert. Therefore, the court did not err in allowing this expert’s testimony.

Pinnacol asserted that the trial court erred in rejecting its tendered instruction concerning the liability of a designated nonparty. Pinnacol designated Merrill a nonparty at fault, but Pinnacol failed to establish that Merrill, as Schuessler’s employer, had a legal duty to Schuessler to maintain and immediately produce employment records such that a violation of that duty would give rise to a claim against it by Schuessler.

Pinnacol argued that the trial court erroneously rejected its instruction on the comparative fault of Schuessler. Pinnacol’s assertions that Schuessler was comparatively at fault because he asked for a postponement of the workers’ compensation hearing, failed to attend an appointment with a second doctor, and initially delayed several weeks before going to the doctor after the injury were insufficient to warrant an instruction.

Pinnacol asserted that the trial court’s award of costs should be reversed or reduced. The award of fees, which should be attributable only to the case against Dr. Wolter, should not be assessed against Pinnacol. The case was remanded to reverse this portion of the cost award.

Pinnacol also contended that the trial court improperly awarded prejudgment interest. Because Schuessler’s economic damages did not result from a personal injury inflicted by Pinnacol, the case was remanded for the court to properly compute the prejudgment interest on Schuessler’s economic damages based on the wrongful withholding statute, CRS § 5-12-102(1)(a).

Pinnacol argued that the trial court improperly ruled that it had waived its right to make a subrogation claim against Schuessler’s recovery from Wolter. Waiver is the intentional relinquishment of a known right. Here, Pinnacol did not waive its subrogation rights. Accordingly, on remand, Pinnacol may assert its subrogation rights.

In this case involving allegations of deceptive trade practices, civil theft, and racketeering, plaintiffs Jesus Devora, Julian Martinez, and Manuel Moreno (collectively, homeowners) appealed the district court’s order denying their motion to certify the case as a class action lawsuit against defendants J. Mark Strodtman and JS Real Estate LLC. The judgment was vacated and the case was remanded.

Defendants built homes in Weld County that were purchased by homeowners. Homeowners alleged in their complaint that defendants induced them to buy homes under prices and terms they could not afford, misrepresented and failed to disclose loan financing terms, engaged in a pattern of racketeering, and intended to permanently deprive mortgage lenders of the proceeds defendants had received from the loans.

The Court of Appeals first determined whether plaintiffs’ notice of appeal was timely filed. Where a named plaintiff chooses not to file an interlocutory appeal of an order denying class certification under CRS § 13-20-901(1), the plaintiff does notwaive the right to appeal that order by requesting and obtaining a CRCP 54(b) certification of final judgment, or on a final judgment on the merits. Because homeowners chose not to appeal the district court’s order under CRS § 13-20-901(1), they had the option of awaiting a final judgment on the merits of their individual claims or requesting a CRCP 54(b) order. Homeowners obtained a Rule 54(b) order and filed a timely notice of appeal. Therefore, this Court had jurisdiction to consider plaintiffs’ appeal.

Homeowners contended that the district court erred in finding they did not meet the typicality and adequacy requirements of CRCP 23(a) because the class members had differing damages. The class representatives, however, need to establish only “a nexus between the class representatives’ claims or defenses and the common questions of fact or law which unite the class” to meet the typicality requirement. The typicality requirement may be satisfied even though there is disparity in the damages claimed by the class representatives and the putative class members. Here, the district court erred as a matter of law in finding that homeowners had failed to prove the typicality element of CRCP 23(a), because their damages might or would be different from those of the potential class members. The district court did not make specific findings regarding the remaining requirements of CRCP 23(a) and (b)(3). Thus, it is unknown whether homeowners established those requirements. Therefore, the case was remanded to the district court for further findings of fact and a determination whether homeowners’ class action lawsuit should be certified.

While driving an Allied garbage truck, an Allied employee backed into the corner of the Hendrickses’ house in the City of Englewood (City). After Allied admitted liability, the trial focused on the amount of damages. The Hendrickses’ expert testified that because the damage could not be repaired due to structural deficiencies, the damaged portion of the home would need to be torn down and rebuilt.

Allied contended that the trial court lacked subject matter jurisdiction because the Hendrickses failed to exhaust their administrative remedies by failing to complete the building permit application process before the damages trial. However, the Hendrickses’ complaint did not seek review of an administrative action, and the building permit process does not provide a remedy for the Hendrickses’ injury. Accordingly, the Hendrickses were not required to exhaust administrative remedies before seeking judicial review.

Allied also contended that the trial court erred by providing jury instructions that misstated the law about noneconomic damages and by admitting testimony about noneconomic damages. The trial court instructed the jury that recoverable damages included “damages and losses suffered by the plaintiffs as a result of the defendant’s conduct, including loss of enjoyment, annoyance, discomfort, and inconvenience,” which are not emotional distress damages. Therefore, the jury was properly instructed on noneconomic damages.

Allied next contended that the trial court erred by permitting Mrs. Hendricks to testify about “pure emotional damages.” Mrs. Hendricks testified that she was “dismayed” and “distraught” by the damage to her property, which are recoverable components of noneconomic damages. Therefore, the trial court did not err in admitting her testimony.

Allied further contended that the trial court was required to grant its request for a hearing on the reasonableness of the Hendrickses’ bill of costs. The bill of costs included costs that were statutorily allowed or otherwise subject to a fixed standard, as well as costs for expert witnesses that cannot be validated by statute or a fixed standard. The trial court did not abuse its discretion in denying the request for a hearing on costs where Allied did not specify which costs it contested and offered no reason for its challenge other than a bare statement that the costs were unreasonable.

Allied also argued that the trial court erred by awarding the Hendrickses prejudgment interest from the date their property was damaged. Because the jury returned a general verdict form that did not apportion damages, the trial court appropriately awarded prejudgment interest from the date the house initially was damaged, which also is when any noneconomic damages began accruing.